Agrium says its on track to beat previous guidance for Q4 earnings

CALGARY — Agrium Inc. (TSX:AGU) is raising its fourth-quarter earnings guidance, citing record-high adjusted earnings at its North American retail division and better-than-expected results at its wholesale fertilizer division.The Calgary-based fertilizer producer, which attributed the improved guidance to strong demand during a prolonged fall application season, said it earned slightly more than $2 per diluted share in the quarter, excluding certain items.Agrium’s previous guidance before Thursday’s announcement had been for between $1.50 to $1.90 per share of adjusted earnings in the fourth quarter.Its shares gained $3.64 to C$114.29 after the Toronto Stock Exchange opened. That exceeds a 52-week high of $111.48 established on Wednesday.Agrium’s revised guidance comes as New York-based fund Jana Partners LLC campaigns to win support from other shareholders for major changes at the company.Jana wants Agrium to concentrate on its wholesale fertilizer business and spin off its retail division, which operates in Canada and the United States.Agrium’s management has been resisting Jana’s move, saying the retail division is an important part of the company’s integrated strategy.“The increase in our estimated financial results is due to a very strong finish to the fall application season in our North American retail operations, supported by an extended fall season in the U.S. and continued strength in grain and oilseed prices,” said Mike Wilson, Agrium President and CEO.“Going forward, continued strength in crop prices and low global grain inventories are anticipated to support a strong spring application season in 2013,” he added.Agrium’s guidance excludes hedging gains or losses and certain other items that can have a positive or negative impact on fully reported net earnings.It said Thursday in the updated guidance that the retail business unit is expected to generate about $120 million of EBITDA in the fourth quarter, resulting in a record $950 million of EBITDA in 2012.EBITDA, a commonly used form of adjusted earnings, refers to earnings before interest, taxes, depreciation and amortization — items that are included in net income under standard accounting practices.Agrium says its wholesale business had $500 million of EBITDA in the fourth quarter and $1.2 billion for 2012 as a whole — better than expected.Agrium said its finalized fourth quarter financial statements and audited annual financial results, plus a more detailed review of operations and an updated outlook, will be provided on Feb. 22.© Thomson Reuters read more